Jet, Sahara deal almost done, hitches over payment

Mumbai: For all practical purposes, the deal between Jet Airways and Air Sahara is through, sources close to the development said. An arbitration panel that was set up to hear both sides of the arguments postponed the final hearing to Thursday morning. Sources said this was because both sides could not come to an understanding on the final modalities of the payment.
As things stand now the enterprise value of Air Sahara is Rs 2,050 crore. Of this, Jet has already paid Air Sahara Rs 500 crore. After factoring in for adjustments on immovable property that Air Sahara owns, the helicopters in its fleet and the interest it has earned until now against Rs 500 crore, the final amount Jet now has to pay for the acquisition is Rs 950 crore.
For a good part of Wednesday, Naresh Goyal of Jet and Subrata Roy of Sahara were holed up with their top teams at the business centre of a plush South Mumbai hotel. Both sides were locked in intense negotiations. Sources said the bone of contention at the meeting was the mode of payment of Rs 950 crore.
The team representing Jet argued that it would pay Rs 500 crore upfront and the remaining Rs 450 crore staggered over four years. This payment, sources said, was subject to certain riders that the Air Sahara team was unwilling to concede to.
12/04/07 Times of India

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Categories: Air Sahara Apr 2007, Jet Airways Apr 2007